WASHINGTON — The federal government’s financial crimes enforcement division has issued new guidance directing banking institutions to monitor for suspicious financial activities connected to individuals without legal immigration status, marking another step in the current administration’s immigration enforcement efforts.
The Financial Crimes Enforcement Network — known as FinCEN — released guidance on Friday instructing financial institutions to monitor for identity theft, payroll tax fraud, and money laundering operations connected to the employment of unauthorized workers.
The advisory follows President Donald Trump’s executive order from May requiring banking institutions to conduct enhanced reviews of customer citizenship status.
The directive instructs banking regulators and federal agencies to identify indicators that individuals lacking legal status may be establishing accounts or securing loans and credit cards. The order proved less stringent than financial institutions had anticipated, as previous reports indicated the administration was considering mandatory citizenship data collection requirements.
While avoiding broad-scale exclusion of entire population groups from banking services, the order and recent advisory work to limit financial system access for those residing in the country without authorization.
Treasury Secretary Scott Bessent stated that the Trump administration “will not allow illegal aliens to abuse financial institutions to steal billions of dollars from hardworking American taxpayers.”
“Schemes to pay unlawful workers often rely upon access to the U.S. financial system, including U.S. banks,” he said.
Given that banking institutions have historically not gathered citizenship or immigration status data from customers, no dependable public statistics exist regarding the financial system risks these customers may present.
The financial services sector had conducted intensive lobbying efforts for months to prevent the administration from implementing an executive order mandating citizenship status collection, contending such requirements would prove costly and create extensive administrative burdens. With the order providing guidance rather than requirements, it appears the banking industry successfully influenced the administration’s approach.
The advisory identifies more than twelve warning signs that financial institutions should monitor to identify individuals potentially residing in the country illegally.
